Frequently Asked Questions

Q: What happens to an employment contract if there is a change to position or remuneration?

For the most part, employers may make changes to the position and remuneration without the need to vary or terminate the contract – but it is a matter of degree. In ascertaining whether or not the employer has the latitude to make the changes without varying or terminating the contract, rests on the facts of each individual case. So how much change to the contract may necessitate in the varying or terminating of the contract? In Martech International Pty Ltd v Energy World Corporation Ltd (2006) 234 ALR 265 at 162, French J said the following: “A contract under which a person is employed, whether directly or through a corporate entity controlled by that person, may be discharged by sufficiently significant changes to the duties and/or the remuneration of the person so employed.”

As French J noted in Martech, the change has to be “significant”, and other case law has generally reinforced this requirement.